Day Trading Order Types & Trade Execution

Question 1

What is a market order in day trading?

Accepted Answer

An order that executes immediately at the best available current price

Answer

An order to buy or sell at a specific price or better

Answer

An order that cancels automatically if not filled within seconds

Answer

An order that remains active until a specific calendar date

Question 2

When placing a buy limit order, the order will execute only:

Accepted Answer

At the limit price or lower

Answer

At any price the market is currently trading at

Answer

At the limit price or higher

Answer

Immediately regardless of the current price

Question 3

The 'bid' price in a stock quote represents:

Accepted Answer

The highest price a buyer is currently willing to pay

Answer

The price at which sellers are willing to sell shares

Answer

The most recent executed transaction price

Answer

The average of the last five transaction prices

Question 4

Slippage in day trading refers to:

Accepted Answer

The difference between the expected execution price and the actual fill price

Answer

A penalty fee charged for canceling an unfilled order

Answer

The time delay between order submission and order confirmation

Answer

A broker's commission applied to each completed transaction

Question 5

A stop-loss order is primarily used to:

Accepted Answer

Limit losses by triggering a sell when price falls to a specified level

Answer

Lock in profits at a predetermined target price

Answer

Enter a new position at an advantageous price level

Answer

Purchase additional shares at a cheaper price to average down

Question 6

A 'Day' order designation means the order:

Accepted Answer

Expires at the end of the current trading session if not filled

Answer

Is valid for exactly 24 hours from the time it was placed

Answer

Can only be submitted during regular market hours

Answer

Executes only at the market open bell

Question 7

An Electronic Communication Network (ECN) in day trading is:

Accepted Answer

An automated system that electronically matches buy and sell orders

Answer

Software used to plot and analyze technical chart indicators

Answer

A type of brokerage account designed specifically for beginner traders

Answer

A government regulatory body that oversees all market transactions